The crypto lending firm, Celsius intends to get support for its operations with the funds from the sell-off. But do they get permission?
Celsius
Celsius Networks, a crypto lending company that had frozen withdrawals in June and has been proceeding through Chapter 11 bankruptcy since July. They asked the United States Bankruptcy Court for the Southern District of New York for permission to sell its stablecoin holdings. This should allow the company to generate liquidity to help “fund the Debtors’ operations.”
A notice was filed by the Celsius’ legal team from Kirkland & Ellis law firm on Thursday. A hearing where the court would accept or decline the motion will take place on Oct. 6.
According to the filing, the company currently holds an equivalent amount of $23 million on different stablecoins. If sold, these funds would go to support Celsius’ current operations. Citing section 363 of the Bankruptcy Code, the filing notes that Section 363 of the Bankruptcy Code is designed to strike a balance between allowing a business to continue its daily operations without excessive court or creditor oversight and protecting secured creditors and others from dissipation of the estate’s assets.
The Next Step For Celsius?
Celsius recently filed a motion, pledging to partially return money to customers. However, it would only apply to Custody and Withold Accounts and for custody assets worth $7,575 or less in value. The move drew criticism from some industry leaders, as the limitation means that only $50 million out of $210 million could be released.
The pressure on Celsius continues to rise as on Aug. 31, an ad hoc group of 64 custodial account holders filed a complaint to recover their assets. The plaintiffs noted that Celsius has “not honored any withdrawals from any programs,” including custody services. According to the complaint, that contradicts the “plain language of the debtors’ terms of use,” as they provide that title to custody assets “always remains with the user.”
As we said, Celsius currently owns 11 different forms of stablecoin, for a total of about $23 million. Major crypto lenders have faced a rocky year, as the popular terraUSD and luna tokens collapsed in May that caused huge losses for several major industry players.
Unfortunately, there is no certainty of what will happen on Oct. 6. As many are concerned about their assets. Wht’s clear is that after court’s decision, celsius have to start responding to the investers and people.
If you liked this post, make sure to check our blog every day as we post metaverse and web3 news and blogs. We would be more than happy if you shared your thoughts in the comment section. That Would help us create the best content for you. Also, you can check out our older blogs at squadland.io.
